Refer to the diagram. Which of the following would cause the optimal quantity of social regulation to be Qy? Multiple Choice An increase in the marginal cost of social regulation A decrease in the marginal cost of social regulation An increase in the marginal benefit of industrial regulation
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- Exercise 3.6. Why is there a social cost to monopoly power? If the gains to producers from monopoly power could be redistributed to consumers, would the social cost of monopoly power be eliminated? Explain briefly.Graph shows the cost and revenue Information for Shitotsu the monopolist. What are the levels of price, output, total (sales) revenue, and total profits if the monopolist were to produce at the positions (a) through (d) indicated in table below? Costs and revenues 40 36 32 28 24 20 16 12 8 4 0 5 10 15 20 25 30 35 Quantity per period a. Total revenue maximization b. Profit-maximization c. Socially optimum price d. Fair-return price MR D=AR MC AC Price ($) 16 G 15 141 Output 20 20 22.5 Total Revenue ($) 320 300 315 Total Profits ($) 120 180Output Price Total Cost 0 $ 500 $150 1 300 300 2 250 475 3 200 675 4 150 900 5 100 1,200 Refer to the demand and cost data for a pure monopolist given in the table. If the monopolist were forced to produce the socially optimal output through the imposition of a ceiling price, the ceiling price would have to be set at Multiple Choice $150. $100. $200. $250.
- A natural monopoly packages Alaskan moss, a unique health product that has no substitutes. The graph illustrates the demand curve for this health product. Price and cost (cents per bag) Q Q 50- D 7 Quantity (thousands of bags per year) >>> Draw only the objects specified in the question Draw the monopoly's marginal revenue curve and label it. If the marginal cost is 30 cents a bag, draw the monopoly's marginal cost curve and label it. Draw a point at the monopoly's profit-maximizing quantity and price How many bags a year does the monopoly sell and what is the price of a bag? The monopoly sells bags a year and the price is cents a bag. >>> Remember that the quantity given on the axis is in thousands of bags.Which of the following describes the type of entry barrier faced for taxicabs? A. There is a natural entry barrier for taxicabs because entry into the market has been limited through price cutting B. There is a natural entry barrier for taxicabs because entry into the market has been limited through quotas. C. There is a created entry barrier for taxicabs because entry into the market has been Ilimited through quotas. D. There is a created entry barrier for taxicabs because entry into the market has been limited through limited access to key natural resources.Based on market research, a film production company in Ectenia obtains the following information about the demand and production costs of its new DVD:1 Demand: P = 1,000 – 10Q Marginal Revenue: MR = 1,000 – 20Q Marginal Cost: MC = 100 + 10Q a. Find the price and quantity that maximize the company’s profit. b. Find the price and quantity that would maximize social welfare. c. Use a graph to illustrate the DWL and calculate the dollar value of the DWL.
- Which of these is a negative production externality? An airline manufacturer must hold up production of a plane at great cost due to delays in its global supply chain. A cereal manufacturer suffers losses due to a drought and unexpected increases in market prices of grains that it uses in its cereals. O Consumers complain to the wrong regulators about price gouging in gasoline markets. A producer of lead for batteries that are used nationwide emits noxious gases in its factory town and local people are getting sick. Thch SaveAssume integer quantities. The firm is a monopoly. The table below shows the demand schedule it faces, as well as its marginal cost of production. The production of the good creates a marginal external benefit equal to $19. 1 3 5 MWTP $35 $29 $24 $18 $11 $6 $1 MC $2.50 $3.50 $6.50 $8.50 $13.50 If the monopoly engages in perfect first-degree price discrimination, what is the marginal $10.50 $12.50 revenue of unit number 2? Round to two decimal places and do not enter the currency symbol. If your answer is $1.125, enter 1.13.Suppose that a vaccine is developed for a highly contagious strain of flu. The likelihood that anyone will get this flu decreases as more people receive the vaccine. One of the demand curves below represents the private demand for the vaccine and the other represents the social demand for the vaccine. 110 T 100 90 80 70 Price ($/dose) IN WAS ON 10 0 30 20 60 50 40 0 25 ' S D1 D2 50 75 100 125 150 175 200 225 250 Quantity (doses/day) The total social benefit of 75 doses is:
- a) If the only goal of a regulator of a natural monopoly firm that charges a uniform price is to ensure that the firm produces the socially optimal level of output, and the regulator has the authority to order the firm to do so, explain why this power could not be exercised when the viability of the firm is taken into account. b) Explain why a regulator, whose sole objective is to ensure that a monopoly firm produce the socially optimal output, would have no need to do anything if the firm were a perfectly discriminating monopoly. c) If the market demand curve is common knowledge for a natural monopoly firm and a regulator, but unlike the firm, the regulator has no information about the firm’s cost curves. Explain how a regulator could incentivize the firm to produce the socially optimal output, bearing in mind that the regulator does not even know which level of output is socially optimal?Why are urban areas willing to subsidize urban transit systems? Does the argument for subsidies make sense to you?$6.00 $4.50 МС АТC $3.50 $3.00 $2.50 $2.00 $1.00 MR 10 20 30 40 50 60 70 80 90 Quantity If the government regulates the monopolist to produce the allocatively efficient quantity and provides a subsidy sufficient to maintain zero econornic profits for the firm, what price would the government set and what level of output would the firm produce? $1.00 and 50 в $2.00 and 80 $3.00 and 50 D $3.50 and 50 E $4.50 and 30 P Type here to search 21/04 8 Price, Cost